The answer to the question mentioned above is the "ECONOMIES OF SCALE". JBS automobiles, a global firm builds factories to serve more than one country and lower the MNE's production costs. JBX automobiles most likely benefit from "Economies of Scale".
Answer:
current market price = $953.29
Explanation:
the market price of the bond = present value of the face value + present value of coupon payments
PV of face value = $1,000 / (1 + 3.865%)¹⁸ = $505.31
PV of coupon payments = $35 x 12.79935 (PV annuity factor, 3.865%, 18 periods) = $447.98
current market price = $505.31 + $447.98 = $953.29
Answer:
Wang Company
Statement of financial position
Equity and liabilities
Issued share capital $70,000
Retained earnings $45,000
115,000
Assets
Non-Current assets
Fixed assets $22,000
Current assets
Cash in hand $93,000
$115,000
Wang company
Income statement
Net sales $88,000
Cost of sales $38,000
Gross margin $50,000
Less:admin expenses $5,000
Net Profit $45,0000
Answer:
14.35%
Explanation:
Simon Software Co
rs= 12%
D/E = 0.25
rRF= 6%
RPM= 5%
Tax rate = 40%.
We are going to find the firm’s current levered beta by using the CAPM formula which is :
rs = rRF+ RPM
12%= 6% + 5%
= 1.2
We are going to find the firm’s unlevered beta by using the Hamada equation:
=bU[1 + (1 −T)(D/E)]
Let plug in the formula
1.2= bU[1 + (0.6)(0.25)]
1.2=(1+0.15)
1.2= 1.15bU
1.2÷1.15
1.0435= bU
We are going to find the new levered beta not the new capital structure using the Hamada equation:
b= bU[1 + (1 −T)(D/E)]
Let plug in the formula
= 1.0435[1 + (0.6)(1)]
=1.0435(1+0.6)
=1.0435(1.6)
= 1.6696
Lastly we are going to find the firm’s new cost of equity given its new beta and the CAPM:
rs= rRF+ RPM(b)
Let plug in the formula
= 6% + 5%(1.6696)
= 14.35%
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